For the primary time in 2025, the US Federal Reserve is making ready to chop rates of interest whereas the S&P 500 is buying and selling at all-time highs, and in response to The Kobeissi Letter, the time has come for an essential shift in markets that would usher within the subsequent crypto market bull run.
Because it stands, document inventory valuations, resilient GDP progress, sticky inflation, and cracks are forming within the labor market, leaving the stage open for volatility in conventional markets that would spill over into the subsequent explosive altcoin season.
Fed Charge Cuts At Document Valuations
Expectations are additionally excessive that the Fed will hold decreasing charges on the subsequent rate of interest choice on Wednesday, September 17, 2025 and thru the tip of this yr. In response to a prolonged thread that was posted on the social media platform X, this might have long-term bullish results on the crypto business.
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The Federal Reserve often cuts charges within the face of financial weak point and depressed fairness markets, however this time is totally different. As famous by The Kobeissi Letter, valuation metrics tracked by Bloomberg present US shares are costlier than ever, having surpassed even the 1929 pre-Melancholy peak and the dot-com bubble. Moreover, the S&P 500’s price-to-book ratio hit 5.3x in late August, its document degree.
Regardless of these extremes, policymakers are anticipated to chop by at the least 25 foundation factors this week based mostly on weak point within the labor market. Historical past reveals that when charge cuts occurred with shares inside 2% of all-time highs, as proven in 2019 and 2024, the S&P 500 delivered sturdy features over the next yr. This uncommon combine may as soon as once more amplify capital flows into high-growth belongings, together with cryptocurrencies, within the final quarter of 2025.
A Good Time For Altcoins
Reducing charges into scorching inflation provides liquidity gasoline simply as buyers chase danger belongings. That backdrop has at all times induced highly effective surges for Gold, Bitcoin, and different main cryptocurrencies, because the return of those belongings thrives when fiat returns come below query.
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As The Kobeissi Letter framed it, the time has come. The Fed’s choice to chop charges with shares at document highs, amid a 3% GDP progress and scorching inflation 110 bps above the Fed’s long-term goal, might be the motive force of the following altcoin season. Gold and Bitcoin have already been priced on this new period of liquidity, as each at the moment are up by 450% and 105%, respectively, since 2023.
The setup is even higher for altcoins like Ethereum, XRP, Chainlink, and most particularly cryptocurrencies concerned within the rising AI area of interest. There might be extra immediate-term volatility, however long-term asset homeowners will profit probably the most from the speed reduce.
Nevertheless, if the Federal Reserve opts for a slower tempo of cuts than markets are at the moment pricing in, the frustration may ripple by way of each equities and cryptocurrencies and trigger short-term declines this week.
Featured picture from Getty Photographs, chart from Tradingview.com
